The balance sheets of Global Trading Company follow:

Balance Sheets as of December 31,

Additional Information:
∙ The Company reported a net loss of $279,500 during 2017.
∙ There are no income taxes.
∙ Goodwill as of December 31, 2016, was part of an acquisition made during 2016.
∙ The Company's bank provides a working capital loan to a maximum of 75% of net accounts receivable and inventory.
Required:
1. Prepare a statement of cash flows using the indirect method for the year ended December 31, 2017.
2. On the basis of available information, assess the financial performance of the company during 2017. In answering this part, consider both the net income and cash flows of the company. Also evaluate the future prospects of the company.
3. Assuming that the bad debt expense during 2017 was $55,000, calculate the amount of bad debts written off during the year. Further assume that the company collected $1,250,000 cash from its customers during 2017, and then compute the sales revenue for the year. You may assume that all sales are credit sales.
4. In answering this part, assume that Global uses the first-in, first-out (FIFO) inventory method. On December 31, 2017, the company purchased $35,000 worth of inventory on credit from a supplier. The transaction was inadvertently not recorded and the inventory not included in the December 31, 2017, physical inventory count. Discuss the effect of this omission on Global Trading Company's financial statements.

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2017 2016 Assets Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid insurance $120,000 50,000 (20,000) 80,000 $108,000 300,000 (30,000 250,000 20,000 Property, plant, and equipment Less: Accumulated depreciation Goodwill 500,000 (450,000) 70,000 $818,000 Total assets $280,000 Liabilities and Owners' Equity Accounts payable Salaries payable Bank loan Capital stock Retained earnings $100,000 17,000 82,500 75,000 5,500 $280,000 $ 22,000 11,000 390,000 75,000 320,000 $818,000 Total liabilities and owners' equity